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In test case, Internet cafe reopens

Will.Dickey@Jacksonville.com--07/30/13--Customers line up at Pete's Retreat Cyber Cafe Tuesday, July 30, 2013 in Jacksonville, Florida. The business has recently re-opened after being closed. (The Florida Times-Union, Will Dickey)

Months after the Florida Legislature passed a bill to outlaw them, an “Internet cafe” has reopened in Jacksonville with its employees wearing T-shirts with bulls eyes on the back.

“We were told by the city that we opened at our own risk and that we would have bulls eyes on our backs,” said Pete Miller, general manager of Pete’s Retreat Cyber Cafe on Normandy Boulevard.

Pete’s Retreat is owned by William Carpenter of North Carolina. Miller said he was speaking on behalf of the owner.

Like every other Internet cafe in Florida, Pete’s Retreat shut down in April after lawmakers passed a bill that banned about 1,000 strip-mall gaming centers from using slot-machine-like computer games. It reopened for business at 6 p.m. Friday and had about 70 people show up that night. On Monday, about 245 people came, Miller said.

Miller said Pete’s Retreat has overhauled how it operates to conform with the new law but acknowledges that police may disagree.

“I don’t want to get shut down and I really don’t want to get arrested,” Miller said. “But I’m confident what we’re doing is completely legal.

The new state law leaves it up to local authorities to enforce the ban. The office of Florida Attorney General Pam Bondi said it would be up to the city of Jacksonville and the Jacksonville Sheriff’s Office to determine whether Pete’s Retreat is breaking the law.

The Sheriff’s Office said it didn’t know about the reopening until Monday and is investigating if what the business is doing is legal.

“I cannot comment on any statements made by a business owner claiming to be in compliance of the law,” said Sheriff’s Office spokeswoman Lauri-Ellen Smith, while adding that Pete’s will be looked into.

Jacksonville Assistant General Counsel Jason Teal said the city, state attorney and sheriff would likely work together to determine whether Pete’s and any similar establishments that open up are legal.

“This is obviously a test balloon and the whole state is watching, and if this one is allowed to remain open, I’d assume other’s will reopen as well,” Teal said.

Miller said the new equipment, supplied by Blue Water Technologies, puts Pete’s in compliance with the law because computer games are no longer used like slot machines. He said lawyers have looked at the new computer games and been told they are legal.

Teal said that may be correct.

“If the equipment doesn’t fall under the state law, then we can’t regulate it,” Teal said.

The office has run on money businesses paid for licenses and projected spending $179,000 in the coming year. There had been an expectation that business shuttered by state lawmakers might try to reopen, most likely after a court fight.

“With so much uncertainty, it was not operationally prudent to not budget for this activity,” Terrance Ashanta-Barker, director of the city’s Neighborhoods Department, said by email last week.

State Sen. John Thrasher, R-St. Augustine, who sponsored the law designed to shut the centers down, said it would next be up to police.

But if they’ve found a loophole, the Legislature will address it during the 2014 session, Thrasher said.

The law was passed about a month after 57 people, including top officials in the Jacksonville police union, were arrested in a racketeering investigation into St. Augustine-based Allied Veterans of the World.

Those arrests led to the resignation of Lt. Gov. Jennifer Carroll, who was paid $72,000 by Allied Veterans to do consulting work while a Northeast Florida legislator. Carroll has not been charged with any wrongdoing and all 57 people arrested are still awaiting trial.

Investigators say Allied Veterans, which calls itself a nonprofit, brought in $300 million but gave only 2 percent to veterans groups.

Miller said Pete’s Retreat was different from Allied because it is a for-profit business that never claimed to be a charity.

But some aspects of Pete’s are similar to Allied.

Both argue they offer “sweepstakes” and not gambling. They sell customers Internet or phone time that allows them to get online. But most customers play sweepstakes that allow them to win money.

Thrasher’s bill did not address whether these types of sweepstakes are really gambling, and so the issue remains a gray area. The centers have argued that what they offer is no different from McDonald’s monopoly games where money can be won.

Florida Department of Agriculture spokeswoman Erin Gillespie said McDonald’s offers games to get people into the restaurant to buy food, while the centers want people to come so they can play the games.

Miller acknowledges most of his customers play the games, but some do use the Internet because they don’t have computers at home.

The company also makes its money from selling time on the computers and doesn’t make any money when the customers lose with the sweepstakes, he said.

Thrasher said these establishments take advantage of customers. But Miller said he objected to people like Thrasher denigrating his profession.

“There are thousands of people in Jacksonville who want to do this,” he said. “We’re not an evil industry.”